First of all, Krillin's wish was NOT granted. It's believed that Android #18 was a human. Then Dr. Gero forcefully turned her into a cyborg. In an episode of DBZ, Goku questioned about how #18 could have children but she replied that she still had some human body parts. It's also rumored she may be Dr. Gero's biological daughter. So yeah, she's actually a cyborg, that's why she can give birth.